Insurance fraud cases up by 10 percent thanks to COVID-19 | Personal Finance | Finance

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Whiplash accounted for 60 percent of all detected cons in 2020 and even though road traffic fell markedly during the lockdowns, Aviva said cash-for-crash claims grew 20 percent. On Monday the Ministry of Justice introduced reforms aimed at curbing whiplash fraud.

The insurance giant also said that it detected cheating on more than 29,000 motor cover applications – up 34 per cent on pre-pandemic levels.

“Ghost broking”, which is when unauthorised brokers sell doctored or fake cover to unsuspecting victims, now accounts for 20 percent of policy crime, according to Aviva.

And when furlough ends at the end of September, Aviva claims director David Lovely predicts scam levels will spike.

He said: “The recessionary factors caused by COVID-19 have arguably created the biggest fraud threat to customers in a generation. Currently, Government intervention is mitigating many of these financial impacts, but unfortunately, we expect to see significantly more fraud.

“Policy fraud, such as ghost broking, is one area in particular where we believe we will see increases in attempted fraud, as people misrepresent policies to access cheaper premiums.

“As households and businesses come under increased financial stress, we expect to see more claims of fraud, especially on home, small business and liability policies.”

And it’s not just insurance companies that are being targeted.

Financial crime detection software provider Feedzai says attacks on banks by criminals rocketed in the first quarter.

Cases where villains tried to disguise activities among legitimate transactions, grew 159 per cent. It added that the internet accounted for 83 percent of all card scams and that people using Android smartphones were nearly twice as likely to fall victim to cyber criminals.



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